British American Tobacco: Just so wrong, it’s right
BAT’s annual report shows market share, revenue and profit from operations all increasing, despite regulations
Tobacco companies are the zombies of the corporate world, bouncing back up every time you think they’ve dropped to the mat for a 10 count.
The sector has been a target since at least 1604, when King James I wrote his snappy polemic A Counterblaste to Tobacco. In it, the opinionated Stuart monarch described tobacco use as a “custome lothsome to the eye, hatefull to the Nose, harmefull to the braine, dangerous to the Lungs, and in the blacke stinking fume thereof, neerest resembling the horrible Stigian smoke of the pit that is bottomelesse.”
The occasional ban ensued, but tobacco was such a good tax generator that it thrived until the first modern anti-smoking campaign was launched by the Nazis in the Third Reich.
In 1950 research was published in the British Medical Journal suggesting a close link between smoking and lung cancer, and it is remarkable that nearly 70 years later, the punters are still puffing away with abandon.
British American Tobacco’s annual report shows the continued strength of the business, with market share, revenue and profit from operations all increasing.
The industry faces a number of threats in the regulatory environment, and BAT is responding by investing in what it coyly describes as “potentially reduced-risk products”. The aim is to give smokers their nicotine fix with less chance of ending up in a box themselves, and this is a rapidly evolving field with potentially huge rewards for the winners.
BAT has proved itself to be a strong performer over the years, and it is well-placed to continue to thrive in these new markets.